q2 2018 earnings release

Q2 2018 EARNINGS RELEASE JULY 25, 2018

2 Q2 2018 Earnings Release | ©2018 Pentair | Confidential property of Pentair. Do not reproduce without express permission of Pentair.

Forward-Looking Statements CAUTION CONCERNING FORWARD-LOOKING STATEMENTS THIS PRESENTATION CONTAINS STATEMENTS THAT WE BELIEVE TO BE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT ARE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITATION, ANY STATEMENTS PRECEDED OR FOLLOWED BY OR THAT INCLUDE THE WORDS "TARGETS," "PLANS," "BELIEVES," "EXPECTS," "INTENDS," "WILL," "LIKELY," "MAY," "ANTICIPATES," "ESTIMATES," "PROJECTS," "SHOULD," "WOULD," "POSITIONED," "STRATEGY," "FUTURE" OR WORDS, PHRASES OR TERMS OF SIMILAR SUBSTANCE OR THE NEGATIVE THEREOF, ARE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO RISKS, UNCERTAINTIES, ASSUMPTIONS AND OTHER FACTORS, SOME OF WHICH ARE BEYOND OUR CONTROL, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE THE ABILITY TO REALIZE THE ANTICIPATED BENEFITS FROM THE SEPARATION OF NVENT ELECTRIC PLC FROM PENTAIR (THE "SEPARATION"); ADVERSE EFFECTS ON OUR BUSINESS OPERATIONS OR FINANCIAL RESULTS AND THE MARKET PRICE OF OUR SHARES AS A RESULT OF THE CONSUMMATION OF THE SEPARATION; THE ABILITY OF OUR BUSINESS TO OPERATE INDEPENDENTLY FOLLOWING THE SEPARATION; OVERALL GLOBAL ECONOMIC AND BUSINESS CONDITIONS IMPACTING OUR BUSINESS; THE ABILITY TO ACHIEVE THE BENEFITS OF OUR RESTRUCTURING PLANS; THE ABILITY TO SUCCESSFULLY IDENTIFY, FINANCE, COMPLETE AND INTEGRATE ACQUISITIONS; COMPETITION AND PRICING PRESSURES IN THE MARKETS WE SERVE; THE STRENGTH OF HOUSING AND RELATED MARKETS; VOLATILITY IN CURRENCY EXCHANGE RATES AND COMMODITY PRICES, INCLUDING THE IMPACT OF TARIFFS; INABILITY TO GENERATE SAVINGS FROM EXCELLENCE IN OPERATIONS INITIATIVES CONSISTING OF LEAN ENTERPRISE, SUPPLY MANAGEMENT AND CASH FLOW PRACTICES; INCREASED RISKS ASSOCIATED WITH OPERATING FOREIGN BUSINESSES; FAILURE OF MARKETS TO ACCEPT NEW PRODUCT INTRODUCTIONS AND ENHANCEMENTS; THE IMPACT OF CHANGES IN LAWS AND REGULATIONS, INCLUDING THOSE THAT LIMIT U.S. TAX BENEFITS; THE OUTCOME OF LITIGATION AND GOVERNMENTAL PROCEEDINGS; AND THE ABILITY TO ACHIEVE OUR LONG-TERM STRATEGIC OPERATING GOALS. ADDITIONAL INFORMATION CONCERNING THESE AND OTHER FACTORS IS CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2017. ALL FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION. PENTAIR PLC ASSUMES NO OBLIGATION, AND DISCLAIMS ANY OBLIGATION, TO UPDATE THE INFORMATION CONTAINED IN THIS PRESENTATION.


Key Definitions • Except as Otherwise Noted All References to 2018 and 2017 Represent Our

Results from Continuing Operations for the Period Indicated, Presented on an Adjusted Basis

• "Core Sales" Refers to GAAP Revenue from Continuing Operations Excluding (1) the Impact of Currency Translation and (2) the Impact of Revenue from Acquired Businesses Recorded Prior to the First Anniversary of the Acquisition Less the Amount of Sales Attributable to Divested Product Lines Not Considered Discontinued Operations

• Segment Income Represents Equity Income of Unconsolidated Subsidiaries and Operating Income from Continuing Operations Exclusive of Non-Cash Intangible Amortization, Certain Acquisition Related Expenses, Costs of Restructuring Activities, Impairments, and Other Unusual Non-Operating Items

• Return on Sales ("ROS") Equals Segment Income Divided by Sales

• See Appendix for GAAP to Non-GAAP Reconciliations


Executive Summary

Raising FY Adjusted EPS Guidance to ~$2.31; Up 19%

• Expect Core Sales to Grow 3-4%

• Expect ROS to Expand ~50 bps to ~18%

• Price Increases Announced to Help Mitigate Higher than Anticipated Inflation … Expect to Benefit Q4 More than Q3

• Adjusted EPS Expected to be ~$2.31 … Anticipate Another Strong Free Cash Flow Year

• Core Sales Grew 3%

• ROS Expanded 90 bps to 21.0%

• Adjusted EPS Grew 18% to $0.71; Free Cash Flow of $364M

• Bought Back $150M of Stock in the Quarter

Q2’18

Outlook 2018


21.0% ROS

Q2'18 Pentair Performance

Solid Execution and Strong ROS Expansion

Sales

Segment Income

(1 pt)

*Non-Cash Intangible Amortization

Financial Highlights (YoY)

$9M *

Q2'17 FX Q2’18 Price Volume

$14M

$754M

$8M

($7M)

$12M $781M

2 pts 1 pt (1 pt) 2 pts

4% YoY

4 pts Acq./

Divestitures

Q2'17 Q2’18 Prod. Inflation

$18M $152M

$2M

($16M) $8M $164M

2.0% (0.1%) (2.2%) 1.2%

8% YoY

Growth/ Price/Acq.

20.1% ROS

$9M *

FX

Core Sales Up 3%

• Aquatic Systems Up 10%

• Filtration Solutions Down 2%

• Flow Technologies Up 2%

Segment Income Up 8%

Adj. EPS $0.71 … Up 18%

• Adjusted Tax Rate of 18.0%

• Adjusted Net Interest/Other of $8.6M; Shares 178.6M

Free Cash Flow of $364M … In Line with Normal Seasonal Patterns

ROS 21.0% … Up 90 bps


Q2'18 Pentair Segment Performance

Focus on Driving Business Performance

Q2'17 Q2'18

+7%

$74M $80M

Aquatic Systems Filtration Solutions Flow Technologies

Q2'17 Q2'18

$254M

$276M

Q2'17 Q2'18

$264M $262M

Q2'17 Q2'18

$236M $242M

Q2'17 Q2'18

ROS 18.6% ROS 20.0%

$49M $52M

Q2'17 Q2'18

ROS 17.1% ROS 18.4%

$40M $44M

• Demand Remained Healthy

• Continued Dealer Gains

• Growth Investments and Mix

• Strong North America

• Commercial Strength

• Industrial Project Weakness

• Strong Specialty Sales

• North America Growth

• Large Pump Improvement

Sales Sales Sales

Segment Income Segment Income Segment Income

+10% Core -2%

Core

+2% Core

+10% +7%

ROS 29.3% ROS 28.8%


Seasonally Strong Cash Flow and Further Debt Reduction

DEBT ROLL-FORWARD ($M)

CASH FLOW ($M) DEBT SUMMARY Q2 YTD

2018 2018 Net Income - Continuing Ops $ 78 $ 136 Amortization 9 18 Subtotal $ 87 $ 154 Depreciation 12 25 Capital Expenditures (9) (20) Asset Sales (1) (1) Working Capital 207 (8) Other Accruals/Other 32 (4) Free Cash Flow – Total $ 328 $ 146 Free Cash Flow – Discontinued Ops (36) (11) Free Cash Flow – Continuing Ops $ 364 $ 157

Q2 YTD Use of Cash: 2018 2018 Beginning Debt $ 1,880 $ 1,441 Used (Generated) Cash (328) (146) Share Repurchase 150 300 Dividends 63 126 Cash from nVent (919) (919) Other (66) (22) Ending Debt $ 780 $ 780

Maturity

Q2'18

~$690M 88% Fixed 2019 – 2028

$780M

~$90M 12% Variable 2023

Average Rate ~3.7% *Does Not Include $79M of Cash on Hand

• 2018F Capital Expenditures ~$50M

• 2018F* D&A of ~$87M + ~$17M of Non-Cash Stock Compensation (Continuing Ops)

• ROIC at Quarter End 16.4%

Balance Sheet and Cash Flow

*Corrected D&A and Stock Comp numbers as of 11:00am CT on 7/25/18


Q3'18 Pentair Outlook

Core Sales Growth Expected in All Segments

Q3’18 Financial Outlook (YoY)

Summary • Sales Growth Expected in All Three Segments

Led by Aquatics

• Segment Income Expected to be Approximately Flat Stemming from Higher than Expected Inflation and Timing of Price Increases

• Free Cash Flow Expected to Further Improve

Q3'18 Q3'17 Sales

Op. Income Seg. Income ROS

EPS (Rpt.)

EPS (Adj.)

~$700M

~$110M ~$120M

~17%

~$0.48 ~$0.52

$688M

$102M $120M 17.5%

$0.27 $0.49

Other Items • Tax Rate of ~18% • Net Interest/Other ~$8.5M • Shares ~177M

Core Sales Up ~4-5% • Aquatic Systems Up ~8-9% • Filtration Solutions Up ~1-3% • Flow Technologies Up ~2-3%

Segment Income ~Flat

ROS ~17% … Down ~50 bps


Second Half 2018 Adjusted EPS Outlook

Full Year Guidance Raised Despite Inflation Pressure

Q3

$0.49 ~$0.52

Q3'17 Inflation Q3'18

$0.03

Tax, Shares, Interest FX

• Net Price / Inflation Impact Expected to be Worse in Q3 Offset by Deferred Growth Investment and Other Productivity

• Q3 Price Increase Expected to Read Out in Q4

• Anticipated Higher Full Year Inflation Expected to be More than Offset by Price, Other Recovery Actions

• 2H’18 Benefit from 1H’18 Shares Repurchased

Price Core/Other

+6% YoY

$0.00

($0.10)

$0.03

$0.07

$0.52

~$0.60

Q4'17 Inflation Q4'18

$0.03

Tax, Shares, Interest FX Price Core/Other

$0.00

($0.11)

$0.10

$0.06

Q4

Full Year

$1.94

~$2.31

FY'17 Inflation FY'18

$0.19

Tax, Shares, Interest

FX Price Core/Other

$0.01

($0.35)

$0.19

$0.33

Comments

+19% YoY

+15% YoY


~18% ROS

2018 Pentair Outlook

Positioned to Deliver Core Sales Growth and ROS Expansion

2018 Segment Income Outlook

(1 pt)

*Non-Cash Intangible Amortization

$36M *

2017 FX 2018 Price Volume

~$77M $2.85B

~$43M (~$37M)

~$17M ~$2.95B

~3 pts ~ 1pt (~1 pt) ~1 pt

~4% YoY

~4 pts Acq./

Divestitures 2017 2018 Prod. Inflation

~$91M

$497M

~$2M

(~$80M)

~$28M ~$538M

~2.3% ~Flat (~2.8%) ~1.0%

~8% YoY

Growth/ Price/Acq.

17.5% ROS

$37M *

FX

Core Sales Up 3-4%

• Aquatic Systems Up 8-9%

• Filtration Solutions Up 0-1%

• Flow Technologies Up 2-3%

Segment Income Up ~8%, ROS Up ~50 bps

• ~$20M in Incremental Growth Investments

• ~3% of Net Inflation

• ~1% of Net Productivity … Inclusive of Growth Investments

2018 Sales Outlook

Summary Summary

Net of ~$20M Growth Investment ROS Without Investment - ~19% YoY Without Investment - ~+12%


Full Year 2018 Pentair Outlook

Expecting Solid Performance Across the Board in 2018

FY'18 Financial Outlook (YoY)

Summary

FY'18 FY'17 Sales

Op. Income Seg. Income ROS

EPS (Rpt.)

EPS (Adj.)

~$2.95B

~$452M ~$538M

~18%

~$1.81 ~$2.31

$2.85B

$378M $497M 17.5%

$0.62 $1.94

Other Items • Tax Rate of ~18% • Adjusted Net Interest/Other ~$33M; • Shares ~178.5M

Targeting Free Cash Flow ~100% of Adjusted Net Income

Core Sales Up 3-4% • Aquatic Systems Up 8-9% • Filtration Solutions Up 0-1% • Flow Technologies Up 2-3%

Segment Income Up ~8%

ROS ~18% … Up ~50 bps • Aquatic Systems ROS ~27% • Filtration Solutions ROS ~16% • Flow Technologies ROS ~16%

• Expect Solid Core Sales Growth

• Margins Expected to Improve; Expect Higher Inflation and Accelerated Growth Investments

• Balance Sheet Significantly Improved and Cash Flow Strength Expected


Pentair Strategy Summary

Focused Residential & Commercial Water Treatment Company

Our Vision: To be the Leading Residential & Commercial Water

Treatment Company Value Creation Through:

• Advance Pool Growth

• Accelerate Residential & Commercial Treatment

• Expand in China & Southeast Asia

Focused Strategies:

• Innovation

• Digital Transformation

Accelerated by:

Win Right Values and Utilizing PIMS for Sustained

& Consistent Performance

Sustained Performance

• Remain Investment Grade

• Fuel Core Growth Investments

• Competitive Dividend Yield

• M&A / Intelligent Buy Backs

• Sustained Operating Margin Expansion

• Free Cash Flow = Adjusted Net Income

• ROIC Acceleration

Smart Capital Allocation

• Base Core Growth

• Differentiated Growth

• Tuck-in and Bolt-on M&A

Revenue Growth ~$3B of Revenue*

~18% ROS*

Targeting Free Cash Flow = Adjusted Net Income

Filtration Solutions

Aquatic Systems

Flow Technologies

China / SE Asia

A Pure Play Water Company

*Represents current 2018 outlook

Industrial

Residential Commercial

Sales by Geography

United States

Other Developed

Other Developing

Sales by Vertical

Sales by Segment

Grounded in:


Focused Strategies

Prioritization of Growth Opportunities

• Developing Innovative Products

• Engaging Consumer with Digital Connections

• Building Brand Strength

• Driving Demand Through Loyal Dealer Network

• Expanding Aftermarket Products

• Ample Opportunities in the Fast Growing Automation Segment Advance

Pool Growth

Accelerate Residential

& Commercial Treatment


Pentair Summary

Strong Fundamentals and Attractive Opportunities Ahead

Announced Price Increases to Help Mitigate Higher than Anticipated Inflation; Expect Price Increases to be Fully Realized by End of Q4

Delivered Solid Q2 Results

We have a Large and Installed Base to Serve

We have a Strong Capital Structure, Robust FCF Generation, and Plan to be Disciplined with Our Capital

APPENDIX GAAP TO NON-GAAP MEASUREMENTS & RECONCILIATIONS


Reported To Adjusted 2018 Reconciliation Pentair plc and Subsidiaries

Reconciliation of the GAAP year ended December 31, 2018 to the non-GAAP excluding the effect of 2018 adjustments (Unaudited)

Actual Forecast

In millions, except per-share data First

Quarter Second

Quarter Third

Quarter Full Year

Net sales $ 732.6 $ 780.6 approx $ 700 approx $ 2,945 Operating income 92.7 122.6 approx 110 approx 452

% of net sales 12.7 % 15.7 % approx 16 % approx 15 %

Adjustments: Restructuring and other 5.6 25.0 approx — approx 31 Intangible amortization 9.3 9.1 approx 9 approx 36 Corporate allocations 8.8 2.2 approx — approx 11 Equity income of unconsolidated subsidiaries 0.6 5.2 approx 1 approx 8

Segment income 117.0 164.1 approx 120 approx 538 Return on sales 16.0 % 21.0 % approx 17 % approx 18 %

Net income from continuing operations—as reported 58.4 77.9 approx 84 approx 324 Loss on sale of business 5.3 0.9 approx — approx 6 Loss on early extinguishment of debt — 17.1 approx — approx 17 Interest expense adjustment 6.0 2.4 approx — approx 8 Adjustments to operating income 23.7 36.3 approx 9 approx 78 Income tax adjustments (4.5 ) (7.1 ) approx (2 ) approx (20 )

Net income from continuing operations—as adjusted $ 88.9 $ 127.5 approx $ 91 approx $ 413 Continuing earnings per ordinary share—diluted Diluted earnings per ordinary share—as reported $ 0.32 $ 0.44 approx $ 0.48 approx $ 1.81 Adjustments 0.17 0.27 approx 0.04 approx 0.50 Diluted earnings per ordinary share—as adjusted $ 0.49 $ 0.71 approx $ 0.52 approx $ 2.31


Reported To Adjusted 2017 Reconciliation Pentair plc and Subsidiaries

Reconciliation of the GAAP year ended December 31, 2017 to the non-GAAP excluding the effect of 2017 adjustments (Unaudited)

In millions, except per-share data First

Quarter Second Quarter

Third Quarter

Fourth Quarter

Full Year

Net sales $ 683.3 $ 754.0 $ 687.6 $ 720.8 $ 2,845.7 Operating income—as reported 61.9 129.2 101.8 85.4 378.3

% of net sales 9.1 % 17.1 % 14.8 % 11.8 % 13.3 %

Adjustments: Restructuring and other 11.6 5.9 1.4 9.3 28.2 Intangible amortization 8.7 9.3 9.2 9.2 36.4 Trade name and other impairment — — — 15.6 15.6 Corporate allocations 14.6 6.8 7.5 7.8 36.7 Equity income of unconsolidated subsidiaries 0.2 0.4 0.3 0.4 1.3 Segment income 97.0 151.6 120.2 127.7 496.5

Return on sales 14.2 % 20.1 % 17.5 % 17.7 % 17.5 %

Net income (loss) from continuing operations 12.7 (3.4 ) 49.0 55.8 114.1 Loss on sale of business — — 3.8 0.4 4.2 Pension and other post-retirement mark-to-market loss — — — 8.5 8.5 Loss on early extinguishment of debt — 101.4 — — 101.4 Interest expense adjustment 16.5 11.9 6.8 6.5 41.7 Adjustments to operating income 34.9 22.0 18.1 41.9 116.9 Income tax adjustments (2.5 ) (22.5 ) 11.7 (17.2 ) (30.5 )

Net income from continuing operations—as adjusted $ 61.6 $ 109.4 $ 89.4 $ 95.9 $ 356.3 Continuing earnings per ordinary share—diluted Diluted earnings (loss) per ordinary share—as reported $ 0.07 $ (0.02 ) $ 0.27 $ 0.30 $ 0.62 Adjustments $ 0.26 $ 0.62 $ 0.22 $ 0.22 $ 1.32 Diluted earnings per ordinary share—as adjusted $ 0.33 $ 0.60 $ 0.49 $ 0.52 $ 1.94


Core Sales Growth Reconciliation

Pentair plc and Subsidiaries Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment

For the Quarter Ending June 30, 2018

Actual Q2 Net Sales Growth

Core Currency Acq. / Div. Total

Total Pentair 2.9 % 1.5 % (0.9 )% 3.5 % Aquatic Systems 9.5 % 0.3 % (0.9 )% 8.9 % Filtration Solutions (2.4 )% 2.8 % (1.0 )% (0.6 )% Flow Technologies 1.7 % 1.6 % (0.9 )% 2.4 %

Pentair plc and Subsidiaries Reconciliation of Net Sales Growth to Core Net Sales Growth by Segment

For the Quarter Ending September 30, 2018 and the Year Ending December 31, 2018

Forecast Q3 Net Sales Growth Full Year Net Sales Growth

Core Currency Acq. / Div. Total Core Currency

Acq. / Div. Total

Total Pentair approx 4 - 5 % (1) % (2) % 1 - 2 % 3 - 4 % 1 % (1) % 3 - 4 % Aquatic Systems approx 8 - 9 % (1) % (2) % 5 - 6 % 8 - 9 % 0 % (1) % 7 - 8 % Filtration Solutions approx 1 - 3 % (1) % (2) % (2) - 0 % 0 - 1 % 1 % (1) % 0 - 1 % Flow Technologies approx 2 - 3 % (1) % (3) % (2) - (1) % 2 - 3 % 1 % (2) % 1 - 2 %


ROIC Reconciliation

Second Quarter

Third Quarter

Fourth Quarter

First Quarter

Second Quarter

Dollars in millions 2017 2017 2017 2018 2018

Return on Invested Capital (ROIC)

Segment Income $ 151.6 $ 120.2 $ 127.7 $ 117.0 $ 164.1

Adjusted Effective Tax rate 20.0 % 20.0 % 20.0 % 18.0 % 18.0 %

NOPAT $ 121.3 $ 96.2 $ 102.2 $ 96.0 $ 134.5

Depreciation 12.1 13.0 12.5 12.6 12.3

Capital expenditures ("Cap Ex") (6.4 ) (6.7 ) (13.8 ) (11.5 ) (8.8 ) Total NOPAT, Depreciation, and Cap Ex $ 127.0 $ 102.5 $ 100.9 $ 97.1 $ 138.0

Trailing fourth quarter NOPAT, Depreciation, and Cap Ex $ 386.6 $ 403.3 $ 409.0 $ 427.5 $ 438.5

Ending Invested Capital $ 2,632.0 $ 2,661.3 $ 2,594.2 $ 2,862.6 $ 2,590.3

Trailing five quarter average invested capital $ 2,624.9 $ 2,649.0 $ 2,637.6 $ 2,710.7 $ 2,668.1

After Tax Return on Invested Capital 14.7 % 15.2 % 15.5 % 15.8 % 16.4 %

NOPAT (Net Operating Profit After Tax) is Defined as [(Segment Income) X (1 - Adjusted Effective Tax Rate)] Ending Invested Capital is Defined as [Total Shareholders' Equity + Long-term Debt + Current Maturities of Long-term Debt and Short-term Borrowings - Cash and Cash Equivalents - Net Assets Held for Sale]


Free Cash Flow Reconciliation

Pentair plc and Subsidiaries Reconciliation of the GAAP operating activities cash flow to the non-GAAP free cash flow (Unaudited)

Six months ended

In millions June 30,

2018 June 30,

2017 Net cash provided by (used for) operating activities of continuing operations $ 177.8 $ 84.9 Capital expenditures (20.3 ) (18.7 ) Proceeds from sale of property and equipment (0.5 ) — Free cash flow from continuing operations $ 157.0 $ 66.2 Net cash provided by (used for) operating activities of discontinued operations (5.9 ) 70.4 Capital expenditures of discontinued operations (7.4 ) (25.7 ) Proceeds from sale of property and equipment of discontinued operations 2.3 4.1 Free cash flow $ 146.0 $ 115.0

q2 2018 earnings release

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